Cenovus encouraged by talks with Carney government but says regulatory hurdles remain

The Cenovus Christina Lake oilsands facility steam-assisted gravity drainage pad southeast of Fort McMurray, Alta., is shown on Wednesday, April 24, 2024. THE CANADIAN PRESS/Amber Bracken

CALGARY — Cenovus Energy Inc. says it is “cautiously optimistic” about the federal government’s commitment to building new projects that aim to spearhead economic growth, but the company hopes to see Ottawa clear obstacles that lie in the way for the energy sector.

Those include “a lot of regulatory hurdles,” said Jeff Lawson, the Calgary-based oil producer’s executive vice-president of corporate development.

Speaking on the company’s second-quarter earnings call Thursday, Lawson said he was intrigued by the Liberal government’s passing of Bill C-5, also known as the Building Canada Act, which gave Ottawa sweeping new powers to speed up permitting for “nation-building projects.”

He said the legislation, which passed in June, is “well-intentioned.”

“We love the notion of new projects and strengthening the Canadian economy. At the same time, we need to take a step back and say, ‘What’s precluding us from proceeding with these things?’” he said in response to a journalist’s question about the current policy environment.

“There’s a lot of talk about an energy corridor, a new pipe to the coast, yet we still have a tanker ban, an emissions cap, methane regulations, an industrial carbon tax that isn’t competitive with other jurisdictions. So those are things we need to see, we think, change for major projects to occur.”

The Canadian energy sector has called on Prime Minister Mark Carney to scrap the federal emissions cap on oil and gas producers and repeal industrial carbon pricing to help bolster the industry.

It has also been critical of the Oil Tanker Moratorium Act, which bans oil tankers carrying more than 12,500 metric tons of crude from stopping along parts of British Columbia’s coastline.

Lawson said Carney’s government has been receptive to the industry’s concerns.

“I think the federal Liberal government has been the most constructive with us and our industry than we’ve seen in the course of the past decade,” he said.

“They’re out here often, they’re visiting, and they’re really trying to make an effort, I think, to improve the Canadian economy.”

His comments came as Cenovus slightly revised down its production outlook for the year while reporting it made $851 million in the second quarter, down from an even $1 billion in the same quarter last year.

The company now expects to produce between 805,000 and 825,000 barrels of oil equivalent per day this year, down by 10,000 boe/d, in part because of a well leak at its Rush Lake facilities in western Saskatchewan.

Second-quarter production came in at 765,900 barrels of oil equivalent per day, compared with 800,000 boe/d last year.

Cenovus’ earnings for the quarter amounted to 45 cents per diluted share, down from 53 cents a year earlier. The mean analyst estimate had been for earnings of 16 cents per share, according to LSEG Data & Analytics.

Revenue for the three months ended June 30 totalled $12.3 billion, down from $14.6 billion in the second quarter of 2024.

Cenovus said it had $355 million of free funds flow during the quarter, down from $1.21 billion in the same quarter last year.

Chief executive Jon McKenzie said the company is nearing completion of numerous growth and maintenance projects that should clear the way for increased free funds flow.

This report by The Canadian Press was first published July 31, 2025.

By Sammy Hudes